[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3115 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3115

   To improve access, affordability, and competition in health care, 
through the implementation of flexible savings accounts and malpractice 
                    reform, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 22, 1993

Mr. Dreier introduced the following bill; which was referred jointly to 
    the Committees on Ways and Means, Energy and Commerce, and the 
                               Judiciary

_______________________________________________________________________

                                 A BILL


 
   To improve access, affordability, and competition in health care, 
through the implementation of flexible savings accounts and malpractice 
                    reform, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Competitive 
Affordable Health Care Act of 1993''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
 TITLE I--TAX PROVISIONS ENCOURAGING LOW-COST HEALTH PLANS AND HEALTH 
                         CARE SAVINGS ACCOUNTS

Sec. 101. Refundable tax credit for individuals not covered under 
                            employer-provided health plan.
Sec. 102. Limitation on exclusion for employer-provided health 
                            coverage.
Sec. 103. Health care savings accounts.
                 TITLE II--HEALTH CARE COST CONTAINMENT

                Subtitle A--Health Care Liability Reform

Sec. 201. Federal reform of health care liability actions.
Sec. 202. Statute of limitations.
Sec. 203. Requirement for initial resolution of actions in Federal 
                            court through alternative dispute 
                            resolution.
Sec. 204. Calculation and payment of damages.
Sec. 205. Treatment of attorney's fees.
Sec. 206. Joint and several liability.
Sec. 207. Mandatory offsets for damages paid by a collateral source.
Sec. 208. Preemption.
Sec. 209. Definitions.
Sec. 210. Effective date.
      Subtitle B--Limit on Self-Referrals by Health Care Provider

Sec. 221. Limitation on self-referrals by health care providers.
                Subtitle C--Administrative Cost Savings

Sec. 230. Definitions.
              Part 1--Standardization of Claims Processing

Sec. 231. Adoption of data elements, uniform claims, and uniform 
                            electronic transmission standards.
Sec. 232. Application of standards.
Sec. 233. Periodic review and revision of standards.
               Part 2--Electronic Medical Data Standards

Sec. 241. Medical data standards for hospitals and other providers.
Sec. 242. Application of electronic data standards to certain 
                            hospitals.
Sec. 243. Electronic transmission to Federal agencies.
Sec. 244. Advisory commission.
 Part 3--Development and Distribution of Comparative Value Information

Sec. 251. State comparative value information programs for health care 
                            purchasing.
Sec. 252. Comparative value information concerning Federal programs.
Sec. 253. Development of model systems.
             Part 4--Additional Standards and Requirements

Sec. 261. Standards relating to use of medicare and medicaid magnetized 
                            health benefit cards; secondary payer data 
                            bank.
Sec. 262. Preemption of State quill pen laws.
Sec. 263. Use of standard identification numbers.
Subtitle D--Limitation of Antitrust Recovery for Certain Hospital Joint 
                                Ventures

Sec. 271. Purpose.
Sec. 272. Definitions.
Sec. 273. Limitation on damages for antitrust violations.
Sec. 274. Disclosure of hospital joint venture.
                Subtitle E--Medicaid Program Flexibility

Sec. 281. Modification of Federal requirements to allow States more 
                            flexibility in contracting for coordinated 
                            care services under medicaid.
Sec. 282. Period of certain waivers.
TITLE III--REFUNDABLE CREDIT FOR COSTS OF PROVIDING EMERGENCY INDIGENT 
                                  CARE

Sec. 301. Refundable credit for costs of providing emergency indigent 
                            care.

 TITLE I--TAX PROVISIONS ENCOURAGING LOW-COST HEALTH PLANS AND HEALTH 
                         CARE SAVINGS ACCOUNTS

SEC. 101. REFUNDABLE TAX CREDIT FOR INDIVIDUALS NOT COVERED UNDER 
              EMPLOYER-PROVIDED HEALTH PLAN.

    (a) Refundable Credit.--Subpart C of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to refundable 
credits) is amended by redesignating section 35 as section 37 and by 
inserting after section 34 the following new section:

``SEC. 35. QUALIFIED HEALTH CARE COSTS.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as a credit against the tax imposed by this 
subtitle an amount equal to 15 percent of the lesser of--
            ``(1) the health care expenses of the taxpayer, or
            ``(2) the maximum health care expense amount.
    ``(b) Maximum Health Care Expense Amount.--The maximum health care 
expense amount for any taxable year is--
            ``(1) $1,250 in the case of a taxpayer who is allowed only 
        1 exemption amount under section 151,
            ``(2) $2,500 in the case of a taxpayer who is allowed only 
        2 exemption amounts under section 151, and
            ``(3) $4,750 in the case of a taxpayer who is allowed 3 or 
        more exemption amounts under section 151.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--The term `eligible individual' 
        means any individual who is not covered under any employer-
        provided health plan. Such term shall not include an individual 
        for whom an election under section 220 is in effect for the 
        taxable year.
            ``(2) Health care expenses.--The term `health care 
        expenses' means the amount paid during the taxable year which 
        would be allowable as a deduction for the taxable year under 
        section 213 but for the threshold based on adjusted gross 
        income and subsection (e) of this section.
    ``(d) Dollar Amounts Adjusted for Inflation.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year beginning after the date of the 
        enactment of this section, each dollar amount in subsection (b) 
        shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in the 
                taxable year begins, by substituting the calendar year 
                which includes the date of the enactment of this 
                section for the calendar year referred to in 
                subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount as increased under 
        paragraph (1) is not a multiple of $10, such dollar amount 
        shall be rounded to the nearest multiple of $10 (or, if such 
        dollar amount is a multiple of $5 and not of $10, such dollar 
        amount shall be increased to the nearest multiple of $10).
    ``(e) Denial of Medical Expense Deduction for Credited Amounts.--
Any amount for which a credit is allowed under this section shall not 
be taken into account in computing the amount allowable as a deduction 
under section 213(a).''
    (b) Alternative Deduction.--
            (1) In general.--Part VII of subchapter B of chapter 1 of 
        such Code is amended by redesignating section 220 as section 
        221 and by inserting after section 219 the following new 
        section:

``SEC. 220. QUALIFIED HEALTH CARE COSTS.

    ``(a) Allowance of Deduction.--At the election of an eligible 
individual for the taxable year, there shall be allowed as a deduction 
for the taxable year an amount equal to the lesser of--
            ``(1) the health care expenses of the taxpayer, or
            ``(2) the maximum health care expense amount.
    ``(b) Definitions.--For purposes of this section, terms used in 
this section which are also used in section 35 shall have the 
respective meanings given such terms in section 35.
    ``(c) Denial of Medical Expense Deduction for Deducted Amounts.--
Any amount for which a deduction is allowed under this section shall 
not be taken into account in computing the amount allowable as a 
deduction under section 213(a).''
            (2) Deduction allowable whether or not individual itemizes 
        other deductions.--Subsection (a) of section 62 of such Code is 
        amended by adding after paragraph (15) the following new 
        paragraph:
            ``(16) Health insurance costs.--The deduction allowed by 
        section 220.''
    (c) Repeal of Separate Deduction for Self-Employed Individuals.--
Subsection (l) of section 162 of such Code is hereby repealed.
    (d) Clerical Amendments.--
            (1) Subpart C of part IV of subchapter A of chapter 1 of 
        such Code is amended by striking the last item and inserting 
        the following new item:

                              ``Sec. 35. Qualified health care costs.
                              ``Sec. 36. Overpayments of tax.''
            (2) Part VII of subchapter B of chapter 1 of such Code is 
        amended by striking the last item and inserting the following 
        new items:

                              ``Sec. 220. Qualified health care costs.
                              ``Sec. 221. Cross reference.''

SEC. 102. LIMITATION ON EXCLUSION FOR EMPLOYER-PROVIDED HEALTH 
              COVERAGE.

    (a) In General.--The text of section 106 of the Internal Revenue 
Code of 1986 (relating to contributions by employer to accident and 
health plans) is amended to read as follows:
    ``(a) In General.--Gross income of an employee does not include 
employer-provided coverage under an accident or health plan.
    ``(b) Limitation.--The amount excludable from gross income under 
subsection (a) shall not exceed the value of the coverage under the 
lowest-cost available market health plan (as defined in section 
137(c)(4)) available to the employer.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 103. HEALTH CARE SAVINGS ACCOUNTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 137 
as section 138 and by inserting after section 136 the following new 
section:

``SEC. 137. HEALTH CARE SAVINGS ACCOUNTS.

    ``(a) Exclusion.--Gross income of an employee shall not include any 
amount contributed during the taxable year by the employer to a health 
care savings account of such employee.
    ``(b) Limitations.--
            ``(1) Maximum exclusion.--Subsection (a) shall not apply to 
        the extent that the amount contributed to a health care savings 
        account for the taxable year exceeds the cost of the lowest 
        cost available market health plan.
            ``(2) Employee must have catastrophic coverage.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to any employee unless such employee has minimum 
                catastrophic coverage throughout such taxable year for 
                such employee, such employee's spouse, and each 
                dependent (as defined in section 152) of such employee.
                    ``(B) Minimum catastrophic coverage.--For purposes 
                of subparagraph (A), the term `minimum catastrophic 
                coverage' means an insurance plan which pay a minimum 
                of 80 percent of all emergency care expenses per year 
                to the extent such expenses incurred during such year 
                exceed $4,000.
            ``(3) Exclusion limited to employees without other 
        employer-provided health benefits.--This section shall not 
        apply to any employee for the taxable year if any amount is 
        excludable from the gross income of such employee under section 
        106 for such taxable year.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Health care savings account.--The term `health care 
        savings account' means a trust created or organized in the 
        United States exclusively for the purpose of paying the health 
        care expenses of the account beneficiary, but only if the 
        written governing instrument creating the trust meets the 
        following requirements:
                    ``(A) No contribution will be accepted unless it is 
                in cash.
                    ``(B) The trustee is a bank (as defined in section 
                408(n)) or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
            ``(2) Health care expenses.--The term `health care 
        expenses' means, with respect to the account beneficiary, the 
        amount paid by such beneficiary during the taxable year which 
        would be allowable as a deduction for the taxable year under 
        section 213 but for the threshold based on adjusted gross 
        income.
            ``(3) Account beneficiary.--The term `account beneficiary' 
        means the employee for whose benefit the health care savings 
        account is established.
            ``(4) Lowest cost available market health plan.--The term 
        `lowest cost available market health plan' means the regional 
        price of the lowest cost health insurance plan containing a 
        minimum level of health care benefits (as determined by the 
        Secretary of Health and Human Services).
    ``(d) Tax Treatment of Distributions.--
            ``(1) In general.--Any amount paid or distributed out of a 
        health care savings account shall be included in the gross 
        income of the individual for whose benefit such account was 
        established unless such amount is used exclusively to pay the 
        health care expenses of such individual.
            ``(2) Penalty for amounts included in income before the 
        close of calendar year.--If any amount is includible in the 
        gross income of the account beneficiary before the last 
        business day during the taxable year, such beneficiary's tax 
        imposed by this chapter shall be increased by 10 percent of the 
        amount so includible.
            ``(3) Excess contributions returned before due date of 
        return.--Paragraph (1) shall not apply to the distribution of 
        any contribution paid during a taxable year to a health care 
        savings account to the extent that such contribution exceeds 
        the amount excludable under subsection (a) if--
                    ``(A) such distribution is received by the 
                individual on or before the last day prescribed by law 
                (including extensions of time) for filing such 
                individual's return for such taxable year, and
                    ``(B) such distribution is accompanied by the 
                amount of net income attributable to such excess 
                contribution.
        Any net income described in subparagraph (B) shall be included 
        in the gross income of the individual for the taxable year in 
        which it is received.
    ``(e) Tax Treatment of Accounts.--
            ``(1) Account taxed as grantor trust.--The individual for 
        whose benefit a health care savings account is established 
        shall be treated for purposes of this title as the owner 
        thereof and shall be subject to tax thereon in accordance with 
        subpart E of part I of subchapter J of this chapter (relating 
        to grantors and others treated as substantial owners).
            ``(2) Account terminates if individual engages in 
        prohibited transaction.--
                    ``(A) In general.--If, during any taxable year of 
                the individual for whose benefit the health care 
                savings account was established, such individual 
                engages in any transaction prohibited by section 4975 
                with respect to the account, the account ceases to be a 
                health care savings account as of the first day of that 
                taxable year.
                    ``(B) Account treated as distributing all its 
                assets.--In any case in which any account ceases to be 
                a health care savings account by reason of subparagraph 
                (A) on the first day of any taxable year, paragraph (1) 
                of subsection (h) shall be applied as if there were a 
                distribution on such first day in an amount equal to 
                the fair market value (on such first day) of all assets 
                in the account (on such first day) and no portion of 
                such distribution were used to pay health care 
                expenses.
            ``(3) Effect of pledging account as security.--If, during 
        any taxable year, the individual for whose benefit a health 
        care savings account was established uses the account or any 
        portion thereof as security for a loan, the portion so used is 
        treated as distributed to that individual and not used to pay 
        health care expenses.
    ``(f) Custodial Accounts.--For purposes of this section, a 
custodial account shall be treated as a trust if--
            ``(1) the assets of such account are held by a bank (as 
        defined in section 408(n)) or another person who demonstrates 
        to the satisfaction of the Secretary that the manner in which 
        he will administer the account will be consistent with the 
        requirements of this section, and
            ``(2) the custodial account would, except for the fact that 
        it is not a trust, constitute a health care savings account 
        described in subsection (g).
For purposes of this title, in the case of a custodial account treated 
as a trust by reason of the preceding sentence, the custodian of such 
account shall be treated as the trustee thereof.
    ``(g) Reports.--The trustee of a health care savings account shall 
make such reports regarding such account to the Secretary and to the 
individual for whose benefit the account is maintained with respect to 
contributions, distributions, and such other matters as the Secretary 
may require under regulations. The reports required by this subsection 
shall be filed at such time and in such manner and furnished to such 
individuals at such time and in such manner as may be required by those 
regulations.
    ``(h) Other Definitions.--For purposes of this section--
            ``(1) Employer.--The term `employer' includes persons 
        treated as an employer under section 401(c)(4).
            ``(2) Employee.--The term `employee' includes--
                    ``(A) an individual who is an employee within the 
                meaning of section 401(c)(1), and
                    ``(B) former employees.
            ``(3) Type of coverage.--The types of coverage are--
                    ``(A) self-only coverage, and
                    ``(B) coverage other than self-only coverage.
            ``(4) Health insurance plan.--The term `health insurance 
        plan' means any contract or arrangement under which an insurer 
        bears all or part of the cost or risk of providing health care 
        items and services, including a hospital or medical expense 
        incurred policy or certificate, hospital or medical service 
        plan contract, or health maintenance subscriber contract 
        (including any self-insured health insurance plan), but does 
        not include--
                    ``(A) coverage only for accident, dental, vision, 
                disability, or long term care, medicare supplemental 
                health insurance, or any combination thereof,
                    ``(B) coverage issued as a supplement to liability 
                insurance,
                    ``(C) workers' compensation or similar insurance, 
                or
                    ``(D) automobile medical-payment insurance.''
    (b) Exclusion Applies for Employment Tax Purposes.--
            (1) Social security taxes.--
                    (A) Paragraph (20) of section 3121(a) of such Code 
                is amended by striking ``or 132'' and inserting ``132, 
                or 137''.
                    (B) Paragraph (17) of section 209(a) of the Social 
                Security Act is amended by striking ``or 132'' and 
                inserting ``132, or 137''.
            (2) Railroad retirement tax.--Paragraph (5) of section 
        3231(e) of such Code is amended by striking ``or 132'' and 
        inserting ``132, or 137''.
            (3) Unemployment tax.--Paragraph (16) of section 3306(b) of 
        such Code is amended by striking ``or 132'' and inserting 
        ``132, or 137''.
            (4) Withholding tax.--Paragraph (19) of section 3401(a) of 
        such Code is amended by striking ``or 132'' and inserting ``, 
        132, or 137''.
    (c) Tax on Excess Contributions.--Section 4973 of such Code 
(relating to tax on excess contributions to individual retirement 
accounts, certain section 403(b) contracts, and certain individual 
retirement annuities) is amended--
            (1) by inserting ``health care savings accounts,'' after 
        ``accounts,'' in the heading of such section,
            (2) by redesignating paragraph (2) of subsection (a) as 
        paragraph (3) and by inserting after paragraph (1) the 
        following:
            ``(2) a health care savings account (within the meaning of 
        section 137(g)),'',
            (3) by striking ``or'' at the end of paragraph (1) of 
        subsection (a), and
            (4) by adding at the end thereof the following new 
        subsection:
    ``(d) Excess Contributions to Health Care Savings Accounts.--For 
purposes of this section, in the case of a health care savings account 
(within the meaning of section 137(g)), the term `excess contributions' 
means the amount by which the amount contributed for the taxable year 
to the account exceeds the amount excludable from gross income under 
section 137 for such taxable year. For purposes of this subsection, any 
contribution which is distributed out of the health care savings 
account in a distribution to which section 137(h)(2) applies shall be 
treated as an amount not contributed.''
    (d) Tax on Prohibited Transactions.--Section 4975 of such Code 
(relating to prohibited transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(4) Special rule for health care savings accounts.--An 
        individual for whose benefit a health care savings account 
        (within the meaning of section 137(g)) is established shall be 
        exempt from the tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be a health care savings 
        account by reason of the application of section 137(h)(2)(A) to 
        such account.'', and
            (2) by inserting ``or a health care savings account 
        described in section 137(g)'' in subsection (e)(1) after 
        ``described in section 408(a)''.
    (e) Failure To Provide Reports on Health Care Savings Accounts.--
Section 6693 of such Code (relating to failure to provide reports on 
individual retirement account or annuities) is amended--
            (1) by inserting ``or on health care savings accounts'' 
        after ``annuities'' in the heading of such section, and
            (2) by adding at the end of subsection (a) the following: 
        ``The person required by section 137(g) to file a report 
        regarding a health care savings account at the time and in the 
        manner required by such section shall pay a penalty of $50 for 
        each failure unless it is shown that such failure is due to 
        reasonable cause.''
    (f) Health Care Savings Account Contributions Not Subject to 
Welfare Benefit Fund Rules.--Paragraph (2) of section 419(e) of such 
Code (defining welfare benefit) is amended by striking ``or'' at the 
end of subparagraph (B), by striking the period at the end of 
subparagraph (C) and inserting ``, or'', and by adding at the end 
thereof the following new subparagraph:
                    ``(D) section 137 applies.''
    (g) Clerical Amendments.--
            (1) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by striking the last item and 
        inserting the following:

                              ``Sec. 137. Health care savings accounts.
                              ``Sec. 138. Cross references to other 
                                        Acts.''
            (2) The table of sections for chapter 43 of such Code is 
        amended by striking the item relating to section 4973 and 
        inserting the following:

                              ``Sec. 4973. Tax on excess contributions 
                                        to individual retirement 
                                        accounts, health care savings 
                                        accounts, certain 403(b) 
                                        contracts, and certain 
                                        individual retirement 
                                        annuities.''
            (3) The table of sections for subchapter B of chapter 68 of 
        such Code is amended by inserting ``or on health care savings 
        accounts'' after ``annuities'' in the item relating to section 
        6693.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the close of the calendar year 
which includes the date of the enactment of this Act.

                 TITLE II--HEALTH CARE COST CONTAINMENT

                Subtitle A--Health Care Liability Reform

SEC. 201. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.

    (a) Applicability.--This subtitle shall apply with respect to any 
health care liability claim and to any health care liability action 
brought in any State or Federal court (except as provided in section 
203), except that this subtitle shall not apply to a claim or action 
for damages arising from a vaccine-related injury or death to the 
extent that title XXI of the Public Health Service Act applies to the 
action.
    (b) Preemption of State Law.--Subject to section 208, this subtitle 
supersedes State law only to the extent that State law differs from any 
provision of law established by or under this subtitle. Any issue that 
is not governed by any provision of law established by or under this 
subtitle shall be governed by otherwise applicable State or Federal 
law.
    (c) Federal Court Jurisdiction Not Established on Federal Question 
Grounds.--Nothing in this subtitle shall be construed to establish any 
jurisdiction in the district courts of the United States over health 
care liability actions on the basis of sections 1331 or 1337 of title 
28, United States Code.

SEC. 202. STATUTE OF LIMITATIONS.

    (a) In General.--No health care liability claim may be brought 
against any party after the expiration of the 10-year period that 
begins on the date the party committed the action which caused the 
alleged injury that is the subject of the claim.
    (b) Exception for Claims Based on Intentional Action.--Subsection 
(a) shall not apply to a claim brought against a party if the 
claimant's sole allegation is an allegation of an intentional tort.

SEC. 203. REQUIREMENT FOR INITIAL RESOLUTION OF ACTIONS IN FEDERAL 
              COURT THROUGH ALTERNATIVE DISPUTE RESOLUTION.

    (a) Requirement.--
            (1) In general.--No health care liability action may be 
        brought in any Federal court during a calendar year unless the 
        health care liability claim that is the subject of the action 
        has been initially resolved under the alternative dispute 
        resolution system established by the Secretary under subsection 
        (b).
            (2) Initial resolution of claims under adr.--For purposes 
        of paragraph (1), an action is ``initially resolved'' under an 
        alternative dispute resolution system if--
                    (A) the ADR reaches a decision on whether the 
                defendant is liable to the plaintiff for damages; and
                    (B) if the ADR determines that the defendant is 
                liable, the ADR reaches a decision on the amount of 
                damages assessed against the defendant.
            (3) Exclusion of courts of district of columbia.--For 
        purposes of paragraph (1), the term ``Federal court'' does not 
        include the Superior Court of the District of Columbia or the 
        District of Columbia Court of Appeals.
    (b) Establishment of System.--
            (1) In general.--The Attorney General shall establish an 
        alternative dispute resolution system that meets the 
        requirements of paragraph (2) for the resolution of health care 
        liability claims under the jurisdiction of the Federal courts.
            (2) Requirements described.--The ADR system established by 
        the Attorney General under paragraph (1) meets the requirements 
        of this paragraph if the system--
                    (A) applies to all health care liability claims 
                under the jurisdiction of the Federal courts;
                    (B) requires that a written opinion resolving the 
                dispute be issued not later than 6 months after the 
                date by which each party against whom the claim is 
                filed has received notice of the claim (other than in 
                exceptional cases for which a longer period is required 
                for the issuance of such an opinion), and that the 
                opinion contain--
                            (i) findings of fact relating to the 
                        dispute, and
                            (ii) a description of the costs incurred in 
                        resolving the dispute under the system 
                        (including any fees paid to the individuals 
                        hearing and resolving the claim), together with 
                        an appropriate assessment of the costs against 
                        any of the parties;
                    (C) provides that claims brought under the system 
                shall be heard and resolved by arbitrators appointed by 
                the Secretary in consultation with the Attorney 
                General;
                    (D) requires all parties to present (or to make all 
                reasonable efforts to present) all relevant information 
                relating to the claim to the arbitrator, and permits 
                the arbitrator to request the court of relevant 
                jurisdiction to impose criminal penalties against any 
                party that knowingly or intentionally fails to present 
                (or to make all reasonable efforts to present) such 
                information;
                    (E) provides for the transmittal to the State 
                agency responsible for monitoring or disciplining 
                health care professionals and health care providers of 
                any findings made under the system that such a 
                professional or provider committed malpractice, unless, 
                during the 90-day period beginning on the date the 
                system resolves the claim against the professional or 
                provider, the professional or provider brings a health 
                care liability action contesting the decision made 
                under the system; and
                    (F) provides for the regular transmittal to the 
                Administrator for Health Care Policy and Research of 
                information on disputes resolved under the system, in a 
                manner that assures that the identity of the parties to 
                a dispute shall not be revealed.
    (c) Application of Health Care Liability Standards to Alternative 
Dispute Resolution.--The provisions of this subtitle shall apply with 
respect to claims brought under the alternative dispute resolution 
system established under this section in the same manner as such 
provisions apply with respect to health care liability actions.
    (d) Rules for Health Care Liability Actions Contesting ADR 
Ruling.--
            (1) Requiring party contesting adr ruling to pay attorney's 
        fees and other costs.--
                    (A) In general.--In each health care liability 
                action brought in a Federal court, the court shall 
                require the party that contested the ruling of the 
                alternative dispute resolution system with respect to 
                the health care liability claim that is the subject of 
                the action to pay to the opposing party the costs 
                incurred by the opposing party under the action, 
                including attorney's fees, fees paid to expert 
                witnesses, and other litigation expenses (but not 
                including any fees or costs associated with the 
                resolution of the claim under the alternative dispute 
                resolution system).
                    (B) Exceptions.--Subparagraph (A) shall not apply 
                if--
                            (i) the party contesting the ruling made 
                        under the previous alternative dispute 
                        resolution system shows that--
                                    (I) the ruling was procured by 
                                corruption, fraud, or undue means,
                                    (II) there was partiality or 
                                corruption under the system,
                                    (III) there was other misconduct 
                                under the system that materially 
                                prejudiced the party's rights, or
                                    (IV) the ruling was based on an 
                                error of law;
                            (ii) the party contesting the ruling made 
                        under the previous alternative dispute 
                        resolution system presents new evidence before 
                        the trier of fact that was not available for 
                        presentation under the ADR system; or
                            (iii) the court finds that the application 
                        of such paragraph to a party would constitute 
                        an undue hardship, and issues an order waiving 
                        or modifying the application of such paragraph 
                        that specifies the grounds for the court's 
                        decision.
            (2) Restrictions on evidence presented.--In any health care 
        liability action brought in a Federal court, no party may 
        present any evidence to the court that the party did not 
        present during the previous proceeding under the alternative 
        dispute resolution system unless the court finds that--
                    (A) the party could not reasonably have been aware 
                of the existence of such evidence or its availability 
                for presentation at the time of the ADR proceeding; or
                    (B) the restriction against the ability of the 
                party to present such evidence would constitute an 
                undue hardship against the party.
    (e) Establishment of Model State System.--Not later than 4 years 
after the date of the enactment of this Act, the Secretary (in 
consultation with the Attorney General) shall establish a model 
alternative dispute resolution system that a State may (at its option) 
apply to health care liability claims under the jurisdiction of its 
courts.

SEC. 204. CALCULATION AND PAYMENT OF DAMAGES.

    (a) Limitation on Noneconomic Damages.--
            (1) In general.--Subject to paragraph (2), the total amount 
        of noneconomic damages that may be awarded to a plaintiff and 
        the members of the plaintiff's family for losses resulting from 
        the injury which is the subject of a health care liability 
        action may not exceed $250,000, regardless of the number of 
        parties against whom the action is brought or the number of 
        actions brought with respect to the injury.
            (2) Maximum liability.--The maximum amount of the liability 
        of any defendant for any event, action, or product with respect 
        to all plaintiffs (and potential plaintiffs) in a health care 
        liability action for noneconomic damages may not exceed 
        $1,000,000.
    (b) Allocation of Punitive Damages to Uninsured Risk Pool.--Of the 
total amount of punitive damages imposed under a health care liability 
action--
            (1) 15 percent shall be paid to the plaintiff; and
            (2) 85 percent shall be paid to the United States for the 
        deposit into the Treasury as miscellaneous revenues (for the 
        purpose of financing of tax credits provided under section 35 
        of the Internal Revenue Code of 1986).

SEC. 205. TREATMENT OF ATTORNEY'S FEES.

    If the plaintiff in a health care liability action has entered into 
an agreement with the plaintiff's attorney to pay the attorney's fees 
on a contingency basis, the attorney's fees for the action may not 
exceed--
            (1) 30 percent of the first $100,000 of any award or 
        settlement paid to the plaintiff;
            (2) 20 percent of the next $100,000 of such award or 
        settlement paid to the plaintiff; or
            (3) 10 percent of any additional amounts paid to the 
        plaintiff.

SEC. 206. JOINT AND SEVERAL LIABILITY.

    The liability of each defendant in a health care liability action 
shall be several only and shall not be joint, and each defendant shall 
be liable only for the amount of damages allocated to the defendant in 
direct proportion to the defendant's percentage of responsibility (as 
determined by the trier of fact).

SEC. 207. MANDATORY OFFSETS FOR DAMAGES PAID BY A COLLATERAL SOURCE.

    (a) In General.--The total amount of damages received by a 
plaintiff in a health care liability action shall be reduced (in 
accordance with subsection (b)) by any other payment that has been or 
will be made to the individual to compensate the plaintiff for the 
injury that was the subject of the action, including payment under--
            (1) Federal or State disability or sickness programs;
            (2) Federal, State, or private health insurance programs;
            (3) private disability insurance programs;
            (4) employer wage continuation programs; and
            (5) any other source of payment intended to compensate the 
        plaintiff for such injury.
    (b) Amount of Reduction.--The amount by which an award of damages 
to a plaintiff shall be reduced under subsection (a) shall be--
            (1) the total amount of any payments (other than such 
        award) that have been made or that will be made to the 
        plaintiff to compensate the plaintiff for the injury that was 
        the subject of the action; minus
            (2) the amount paid by the plaintiff (or by the spouse, 
        parent, or legal guardian of the plaintiff) to secure the 
        payments described in paragraph (1).

SEC. 208. PREEMPTION.

    (a) In General.--This subtitle supersedes any State law only to the 
extent that State law--
            (1) permits the recovery of a greater amount of damages by 
        a plaintiff;
            (2) permits the collection of a greater amount of 
        attorneys' fees by a plaintiff's attorney; or
            (3) establishes a longer period during which a health care 
        liability claim may be initiated.
    (b) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in subsection (a) shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976;
            (4) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.

SEC. 209. DEFINITIONS.

    As used in this subtitle:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means the 
        system established by the Attorney General under section 203 
        that provides for the resolution of health care liability 
        claims under the jurisdiction of the Federal courts in a manner 
        other than through health care liability actions.
            (2) Claimant.--The term ``claimant'' means any person who 
        alleges a health care liability claim, or, in the case of an 
        individual who is deceased, incompetent, or a minor, the person 
        on whose behalf such a claim is alleged.
            (3) Economic damages.--The term ``economic damages'' means 
        damages paid to compensate an individual for losses for 
        hospital and other medical expenses, lost wages, lost 
        employment, and other pecuniary losses.
            (4) Health care liability action.--The term ``health care 
        liability action'' means a civil action (other than an action 
        in which the plaintiff's sole allegation is an allegation of an 
        intentional tort) brought in a State or Federal court against a 
        health care provider or health care professional (regardless of 
        the theory of liability on which the action is based) in which 
        the plaintiff alleges a health care liability claim, and 
        includes an action in which the plaintiff alleges harm arising 
        from the use of a medical product.
            (5) Health care liability claim.--The term ``health care 
        liability claim'' means a claim in which the claimant alleges 
        that injury was caused by the provision of (or the failure to 
        provide) health care services or the use of a medical product.
            (6) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by State law or 
        regulation to be licensed or certified by the State to provide 
        such services in the State.
            (7) Health care provider.--The term ``health care 
        provider'' means any organization or institution that is 
        engaged in the delivery of health care services in a State and 
        that is required by State law or regulation to be licensed or 
        certified by the State to engage in the delivery of such 
        services in the State.
            (8) Injury.--The term ``injury'' means any illness, 
        disease, or other harm that is the subject of a health care 
        liability action or claim.
            (9) Medical product.--The term ``medical product'' means a 
        device (as defined in section 201(h) of the Federal Food, Drug, 
        and Cosmetic Act) or a drug (as defined in section 201(g)(1) of 
        the Federal Food, Drug, and Cosmetic Act).
            (10) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages paid to compensate an individual for losses for 
        physical and emotional pain, suffering, inconvenience, physical 
        impairment, mental anguish, disfigurement, loss of enjoyment of 
        life, loss of consortium, and other nonpecuniary losses, but 
        does not include punitive damages.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (12) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, and American Samoa.

SEC. 210. EFFECTIVE DATE.

    This subtitle shall apply with respect to claims accruing or 
actions brought on or after the expiration of the 1-year period that 
begins on the date of the enactment of this Act.

      Subtitle B--Limit on Self-Referrals by Health Care Provider

SEC. 221. LIMITATION ON SELF-REFERRALS BY HEALTH CARE PROVIDERS.

    (a) In General.--If a health care provider refers a patient to any 
facility in which the provider (or a family member) has a financial 
interest for the performance of any health care service, the provider--
            (1) must disclose to the patient the nature of such 
        interest;
            (2) must present the patient with a list of the 3 closest 
        reasonably known available facilities which perform the 
        service; and
            (3) may not place undue pressure on the patient to obtain 
        the service from the facility in which the provider (or a 
        family member) has a financial interest.
    (b) Enforcement.--
            (1) Initial violation.--If a health care provider violates 
        a requirement of subsection (a) and has not previously been 
        subject to a sanction under this subsection, the provider is 
        subject to a civil money penalty in an amount specified under 
        subsection (c).
            (2) Second violation.--If a health care provider violates a 
        requirement of subsection (a) and has previously been subject 
        to a sanction under this subsection, the provider is subject 
        to--
                    (A) a civil money penalty in an amount specified 
                under subsection (c), and
                    (B) a suspension of the right of the provider to 
                provide health care services for a period of time 
                specified under subsection (c).
            (3) Third violation.--If a health care provider violates a 
        requirement of subsection (a), and has previously been subject 
        to a suspension under this subsection--
                    (A) the provider is subject to a civil money 
                penalty in an amount specified under subsection (c), 
                and
                    (B) the provider's right to provide health care 
                services is permanently revoked.
    (c) Amount of Civil Money Penalty and Period of Suspension.--The 
amount of a civil money penalty under subsection (b) and the period of 
any suspension of the right to provide health care services under 
subsection (b) shall be established by the Secretary of Health and 
Human Services based upon the recommendations of the National 
Association of Insurance Commissioners and other health care 
representatives.
    (d) Enforcement Process.--The Secretary of Health and Human 
Services shall establish a process for the imposition of sanctions 
under subsection (b).
    (e) Definitions.--In this section:
            (1) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
            (2) The term ``financial interest'' includes any ownership, 
        income rights, or other pecuniary interest.
            (3) The term ``family member'' includes the spouse, child, 
        grandchild, parent, or sibling, or spouse of such a child, 
        grandchild, parent, or sibling.
    (f) Effective Date.--This section shall apply to referrals made 
later than 1 year after the date of the enactment of this Act.

                Subtitle C--Administrative Cost Savings

SEC. 230. DEFINITIONS.

    For purposes of this subtitle:
            (1) Health benefit plan.--The term ``health benefit plan'' 
        means any hospital or medical expense incurred policy or 
        certificate, hospital or medical service plan contract, or 
        health maintenance subscriber contract, or a multiple employer 
        welfare arrangement or employee benefit plan (as defined under 
        the Employee Retirement Income Security Act of 1974) which 
        provides benefits with respect to health care services. The 
        term includes the medicare program (under title XVIII of the 
        Social Security Act), medicare supplemental health insurance, 
        and a State medicaid plan (approved under title XIX of such 
        Act). The term does not include--
                    (A) coverage only for accident, dental, vision, 
                disability income, or long-term care insurance, or any 
                combination thereof,
                    (B) coverage issued as a supplement to liability 
                insurance,
                    (C) worker's compensation or similar insurance, or
                    (D) automobile medical-payment insurance,
        or any combination thereof.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) State.--The term ``State'' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, and American Samoa.

              Part 1--Standardization of Claims Processing

SEC. 231. ADOPTION OF DATA ELEMENTS, UNIFORM CLAIMS, AND UNIFORM 
              ELECTRONIC TRANSMISSION STANDARDS.

    (a) In General.--The Secretary shall adopt standards relating to 
each of the following:
            (1) Data elements for use in paper and electronic claims 
        processing under health benefit plans, as well as for use in 
        utilization review and management of care (including data 
        fields, formats, and medical nomenclature, and including plan 
        benefit and insurance information).
            (2) Uniform claims forms (including uniform procedure and 
        billing codes for uses with such forms and including 
        information on other health benefit plans that may be liable 
        for benefits).
            (3) Uniform electronic transmission of the data elements 
        (for purposes of billing and utilization review).
Standards under paragraph (3) relating to electronic transmission of 
data elements for claims for services shall supersede (to the extent 
specified in such standards) the standards adopted under paragraph (2) 
relating to the submission of paper claims for such services. Standards 
under paragraph (3) shall include protections to assure the 
confidentiality of patient-specific information and to protect against 
the unauthorized use and disclosure of information.
    (b) Use of Task Forces.--In adopting standards under this section--
            (1) the Secretary shall take into account the 
        recommendations of current taskforces, including at least the 
        Workgroup on Electronic Data Interchange, National Uniform 
        Billing Committee, the Uniform Claim Task Force, and the 
        Computer-based Patient Record Institute;
            (2) the Secretary shall consult with the National 
        Association of Insurance Commissioners (and, with respect to 
        standards under subsection (a)(3), the American National 
        Standards Institute); and
            (3) the Secretary shall, to the maximum extent practicable, 
        seek to make the standards consistent with any uniform clinical 
        data sets which have been adopted and are widely recognized.
    (c) Deadlines for Promulgation.--The Secretary shall promulgate the 
standards under--
            (1) subsection (a)(1) relating to claims processing data, 
        by not later than 12 months after the date of the enactment of 
        this Act;
            (2) subsection (a)(2) (relating to uniform claims forms) by 
        not later than 12 months after the date of the enactment of 
        this Act; and
            (3)(A) subsection (a)(3) relating to transmission of 
        information concerning hospital and physicians services, by not 
        later than 24 months after the date of the enactment of this 
        Act, and
            (B) subsection (a)(3) relating to transmission of 
        information on other services, by such later date as the 
        Secretary may determine it to be feasible.
    (d) Report to Congress.--Not later than 3 years after the date of 
the enactment of this Act, the Secretary shall report to Congress 
recommendations regarding restructuring the medicare peer review 
quality assurance program given the availability of hospital data in 
electronic form.

SEC. 232. APPLICATION OF STANDARDS.

    (a) In General.--If the Secretary determines, at the end of the 2-
year period beginning on the date that standards are adopted under 
section 231 with respect to classes of services, that a significant 
number of claims for benefits for such services under health benefit 
plans are not being submitted in accordance with such standards, the 
Secretary may require, after notice in the Federal Register of not less 
than 6 months, that all providers of such services must submit claims 
to health benefit plans in accordance with such standards. The 
Secretary may waive the application of such a requirement in such cases 
as the Secretary finds that the imposition of the requirement would not 
be economically practicable.
    (b) Significant Number.--The Secretary shall make an affirmative 
determination described in subsection (a) for a class of services only 
if the Secretary finds that there would be a significant, measurable 
additional gain in efficiencies in the health care system that would be 
obtained by imposing the requirement described in such paragraph with 
respect to such services.
    (c) Application of Requirement.--
            (1) In general.--If the Secretary imposes the requirement 
        under subsection (a)--
                    (A) in the case of a requirement that imposes the 
                standards relating to electronic transmission of claims 
                for a class of services, each health care provider that 
                furnishes such services for which benefits are payable 
                under a health benefit plan shall transmit 
                electronically and directly to the plan on behalf of 
                the beneficiary involved a claim for such services in 
                accordance with such standards;
                    (B) any health benefit plan may reject any claim 
                subject to the standards adopted under section 231 but 
                which is not submitted in accordance with such 
                standards;
                    (C) it is unlawful for a health benefit plan (i) to 
                reject any such claim on the basis of the form in which 
                it is submitted if it is submitted in accordance with 
                such standards or (ii) to require, for the purpose of 
                utilization review or as a condition of providing 
                benefits under the plan, a provider to transmit medical 
                data elements that are inconsistent with the standards 
                established under section 231(a)(1); and
                    (D) the Secretary may impose a civil money penalty 
                on any provider that knowingly and repeatedly submits 
                claims in violation of such standards or on any health 
                benefit plan (other than a health benefit plan 
                described in paragraph (2)) that knowingly and 
                repeatedly rejects claims in violation of subparagraph 
                (B), in an amount not to exceed $100 for each such 
                claim.
        The provisions of section 1128A of the Social Security Act 
        (other than the first sentence of subsection (a) and other than 
        subsection (b)) shall apply to a civil money penalty under 
        subparagraph (D) in the same manner as such provisions apply to 
        a penalty or proceeding under section 1128A(a) of such Act.
            (2) Plans subject to effective state regulation.--A plan 
        described in this paragraph is a health benefit plan--
                    (A) that is subject to regulation by a State; and
                    (B) with respect to which the Secretary finds 
                that--
                            (i) the State provides for application of 
                        the standards established under section 231, 
                        and
                            (ii) the State regulatory program provides 
                        for the appropriate and effective enforcement 
                        of such standards.
    (d) Treatment of Rejections.--If a plan rejects a claim pursuant to 
subsection (c)(1), the plan shall permit the person submitting the 
claim a reasonable opportunity to resubmit the claim on a form or in an 
electronic manner that meets the requirements for acceptance of the 
claim under such subsection.

SEC. 233. PERIODIC REVIEW AND REVISION OF STANDARDS.

    (a) In General.--The Secretary shall--
            (1) provide for the ongoing receipt and review of comments 
        and suggestions for changes in the standards adopted and 
        promulgated under section 231;
            (2) establish a schedule for the periodic review of such 
        standards; and
            (3) based upon such comments, suggestions, and review, 
        revise such standards and promulgate such revisions.
    (b) Application of Revised Standards.--If the Secretary under 
subsection (a) revises the standards described in 231, then, in the 
case of any claim for benefits submitted under a health benefit plan 
more than the minimum period (of not less than 6 months specified by 
the Secretary) after the date the revision is promulgated under 
subsection (a)(3), such standards shall apply under section 232 instead 
of the standards previously promulgated.

               Part 2--Electronic Medical Data Standards

SEC. 241. MEDICAL DATA STANDARDS FOR HOSPITALS AND OTHER PROVIDERS.

    (a) Promulgation of Hospital Data Standards.--
            (1) In general.--Between July 1, 1994, and January 1, 1995, 
        the Secretary shall promulgate standards described in 
        subsection (b) for hospitals concerning electronic medical 
        data.
            (2) Revision.--The Secretary may from time to time revise 
        the standards promulgated under this subsection.
    (b) Contents of Data Standards.--The standards promulgated under 
subsection (a) shall include at least the following:
            (1) A definition of a standard set of data elements for use 
        by utilization and quality control peer review organizations.
            (2) A definition of the set of comprehensive data elements, 
        which set shall include for hospitals the standard set of data 
        elements defined under paragraph (1).
            (3) Standards for an electronic patient care information 
        system with data obtained at the point of care, including 
        standards to protect against the unauthorized use and 
        disclosure of information.
            (4) A specification of, and manner of presentation of, the 
        individual data elements of the sets and system under this 
        subsection.
            (5) Standards concerning the transmission of electronic 
        medical data.
            (6) Standards relating to confidentiality of patient-
        specific information.
The standards under this section shall be consistent with standards for 
data elements established under section 231.
    (c) Optional Data Standards for Other Providers.--
            (1) In general.--The Secretary may promulgate standards 
        described in paragraph (2) concerning electronic medical data 
        for providers that are not hospitals. The Secretary may from 
        time to time revise the standards promulgated under this 
        subsection.
            (2) Contents of data standards.--The standards promulgated 
        under paragraph (1) for non-hospital providers may include 
        standards comparable to the standards described in paragraphs 
        (2), (4), and (5) of subsection (b) for hospitals.
    (d) Consultation.--In promulgating and revising standards under 
this section, the Secretary shall--
            (1) consult with the American National Standards Institute, 
        hospitals, with the advisory commission established under 
        section 244, and with other affected providers, health benefit 
        plans, and other interested parties, and
            (2) take into consideration, in developing standards under 
        subsection (b)(1), the data set used by the utilization and 
        quality control peer review program under part B of title XI of 
        the Social Security Act.

SEC. 242. APPLICATION OF ELECTRONIC DATA STANDARDS TO CERTAIN 
              HOSPITALS.

    (a) Medicare Requirement for Sharing of Hospital Information.--As 
of January 1, 1996, subject to paragraph (2), each hospital, as a 
requirement of each participation agreement under section 1866 of the 
Social Security Act, shall--
            (1) maintain clinical data included in the set of 
        comprehensive data elements under section 241(b)(2) in 
        electronic form on all inpatients,
            (2) upon request of the Secretary or of a utilization and 
        quality control peer review organization (with which the 
        Secretary has entered into a contract under part B of title XI 
        of such Act), transmit electronically the data set, and
            (3) upon request of the Secretary, or of a fiscal 
        intermediary or carrier, transmit electronically any data (with 
        respect to a claim) from such data set,
in accordance with the standards promulgated under section 241(a).
    (b) Waiver Authority.--Until January 1, 2000:
            (1) The Secretary may waive the application of the 
        requirements of subsection (a) for a hospital that is a small 
        rural hospital, for such period as the hospital demonstrates 
        compliance with such requirements would constitute an undue 
        financial hardship.
            (2) The Secretary may waive the application of the 
        requirements of subsection (a) for a hospital that is in the 
        process of developing a system to provide the required data set 
        and executes agreements with its fiscal intermediary and its 
        utilization and quality control peer review organization that 
        the hospital will meet the requirements of subsection (a) by a 
        specified date (not later than January 1, 2000).
            (3) The Secretary may waive the application of the 
        requirement of subsection (a)(1) for a hospital that agrees to 
        obtain from its records the data elements that are needed to 
        meet the requirements of paragraphs (2) and (3) of subsection 
        (a) and agrees to subject its data transfer process to a 
        quality assurance program specified by the Secretary.
    (c) Application to Hospitals of the Department of Veterans 
Affairs.--
            (1) In general.--The Secretary of Veterans Affairs shall 
        provide that each hospital of the Department of Veterans 
        Affairs shall comply with the requirements of subsection (a) in 
        the same manner as such requirements would apply to the 
        hospital if it were participating in the Medicare program.
            (2) Waiver.--Such Secretary may waive the application of 
        such requirements to a hospital in the same manner as the 
        Secretary of Health and Human Services may waive under 
        subsection (b) the application of the requirements of 
        subsection (a).

SEC. 243. ELECTRONIC TRANSMISSION TO FEDERAL AGENCIES.

    (a) In General.--Effective January 1, 2000, if a provider is 
required under a Federal program to transmit a data element that is 
subject to a presentation or transmission standard (as defined in 
subsection (b)), the head of the Federal agency responsible for such 
program (if not otherwise authorized) is authorized to require the 
provider to present and transmit the data element electronically in 
accordance with such a standard.
    (b) Presentation or Transmission Standard Defined.--In subsection 
(a), the term ``presentation or transmission standard'' means a 
standard, promulgated under subsection (b) or (c) of section 241, 
described in paragraph (4) or (5) of section 241(b).

SEC. 244. ADVISORY COMMISSION.

    (a) In General.--The Secretary shall establish an advisory 
commission including hospital executives, hospital data base managers, 
physicians, health services researchers, and technical experts in 
collection and use of data and operation of data systems. Such 
commission shall include, as ex officio members, a representative of 
the Director of the National Institutes of Health, the Administrator 
for Health Care Policy and Research, the Secretary of Veterans Affairs, 
and the Director of the Centers for Disease Control.
    (b) Functions.--The advisory commission shall monitor and advise 
the Secretary concerning--
            (1) the standards established under this part, and
            (2) operational concerns about the implementation of such 
        standards under this part.
    (c) Staff.--From the amounts appropriated under subsection (d), the 
Secretary shall provide sufficient staff to assist the advisory 
commission in its activities under this section.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated $2,000,000 for each of fiscal years 1994 through 1999 to 
carry out this section.

 Part 3--Development and Distribution of Comparative Value Information

SEC. 251. STATE COMPARATIVE VALUE INFORMATION PROGRAMS FOR HEALTH CARE 
              PURCHASING.

    (a) Purpose.--In order to assure the availability of comparative 
value information to purchasers of health care in each State, the 
Secretary shall determine whether each State is developing and 
implementing a health care value information program that meets the 
criteria and schedule set forth in subsection (b).
    (b) Criteria and Schedule for State Programs.--The criteria and 
schedule for a State health care value information program in this 
subsection shall be specified by the Secretary as follows:
            (1) The State begins promptly after enactment of this Act 
        to develop (directly or through contractual or other 
        arrangements with one or more States, coalitions of health 
        insurance purchasers, other entities, or any combination of 
        such arrangements) information systems regarding comparative 
        health values.
            (2) The information contained in such systems covers at 
        least the average prices of common health care services (as 
        defined in subsection (d)) and health insurance plans, and, 
        where available, measures of the variability of these prices 
        within a State or other market areas.
            (3) The information described in paragraph (2) is made 
        available within the State beginning not later than 1 year 
        after the date of the enactment of this Act, and is revised as 
        frequently as reasonably necessary, but at intervals of no 
        greater than 1 year.
            (4) Not later than 6 years after the date of the enactment 
        of this Act the State has developed information systems that 
        provide comparative costs, quality, and outcomes data with 
        respect to health insurance plans and hospitals and made the 
        information broadly available within the relevant market areas.
Nothing in this section shall preclude a State from providing 
additional information, such as information on prices and benefits of 
different health benefit plans, available.
    (c) Grants to States for the Development of State Programs.--
            (1) Grant authority.--The Secretary may make grants to each 
        State to enable such State to plan the development of its 
        health care value information program and, if necessary, to 
        initiate the implementation of such program. Each State seeking 
        such a grant shall submit an application therefore, containing 
        such information as the Secretary finds necessary to assure 
        that the State is likely to develop and implement a program in 
        accordance with the criteria and schedule in subsection (b).
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to make grants 
        under this subsection, to remain available until expended.
    (d) Common Health Care Services Defined.--In this section, the term 
``common health care services'' includes such procedures as the 
Secretary may specify and any additional health care services which a 
State may wish to include in its comparative value information program.

SEC. 252. COMPARATIVE VALUE INFORMATION CONCERNING FEDERAL PROGRAMS.

    (a) Development.--The head of each Federal agency with 
responsibility for the provision of health insurance or of health care 
services to individuals shall promptly develop health care value 
information relating to each program that such head administers and 
covering the same types of data that a State program meeting the 
criteria of section 251(b) would provide.
    (b) Dissemination of Information.--Such information shall be made 
generally available to States and to providers and consumers of health 
care services.

SEC. 253. DEVELOPMENT OF MODEL SYSTEMS.

    (a) In General.--The Secretary shall, directly or through grant or 
contract, develop model systems to facilitate--
            (1) the gathering of data on health care cost, quality, and 
        outcome described in section 251(b)(4), and
            (2) analyzing such data in a manner that will permit the 
        valid comparison of such data among providers and among health 
        plans.
    (b) Experimentation.--The Secretary shall support experimentation 
with different approaches to achieve the objectives of subsection (a) 
in the most cost effective manner (relative to the accuracy and 
timeliness of the data secured) and shall evaluate the various methods 
to determine their relative success.
    (c) Standards.--When the Secretary considers it appropriate, the 
Secretary may establish standards for the collection and reporting of 
data on health care cost, quality and outcomes in order to facilitate 
analysis and comparisons among States and nationally.
    (d) Report.--By not later than 3 years after the date of the 
enactment of this Act, the Secretary shall report to the Congress and 
the States on the models developed, and experiments conducted, under 
this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary for each fiscal year beginning 
with fiscal year 1994 to enable the Secretary to carry out this 
section, including evaluation of the different approaches tested under 
subsection (b) and their relative cost effectiveness.

             Part 4--Additional Standards and Requirements

SEC. 261. STANDARDS RELATING TO USE OF MEDICARE AND MEDICAID MAGNETIZED 
              HEALTH BENEFIT CARDS; SECONDARY PAYER DATA BANK.

    (a) Magnetized Identification Cards Under Medicare Program.--The 
Secretary shall adopt standards relating to the design and use of 
magnetized medicare identification cards in order to assist health care 
providers providing medicare covered services to individuals--
            (1) in determining whether individuals are eligible for 
        benefits under the medicare program, and
            (2) in billing the medicare program for such services 
        provided to eligible individuals.
Such cards shall be designed to be compatible with machines currently 
employed to transmit information on credit cards. Such cards also shall 
be designed to be able to be used with respect to the provision of 
benefits under medicare supplemental policies.
    (b) Adoption Under Medicaid Plans.--
            (1) In general.--The Secretary shall take such steps as may 
        be necessary to encourage and assist States to design and use 
        magnetized medicaid identification cards that meet such 
        standards, for use under their medicaid plans.
            (2) Limitation on mmis funds.--In applying section 
        1903(a)(3) of the Social Security Act, the Secretary may 
        determine that Federal financial participation is not available 
        under that section to a State which has provided for a 
        magnetized card system that is inconsistent with the standards 
        adopted under subsection (a).
    (c) Medicare and Medicaid Secondary Payer Data Bank.--The Secretary 
shall establish a medicare and medicaid information system which is 
designed to provide information on those group health plans and other 
health benefit plans that are primary payers to the medicare program 
and medicaid program under section 1862(b) or section 1905(a)(25) of 
the Social Security Act.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated, in equal proportions from the Federal Hospital Insurance 
Trust Fund and from the Federal Supplementary Medical Insurance Trust 
Fund, a total of $25,000,000 to carry out subsections (a) and (c), 
including the issuance of magnetized cards to medicare beneficiaries.

SEC. 262. PREEMPTION OF STATE QUILL PEN LAWS.

    (a) In General.--Effective January 1, 1994, no effect shall be 
given to any provision of State law that requires medical or health 
insurance records (including billing information) to be maintained in 
written, rather than electronic form.
    (b) Secretarial Authority.--The Secretary may issue regulations to 
carry out subsection (a). Such regulations may provide for such 
exceptions to subsection (a) as the Secretary determines to be 
necessary to prevent fraud and abuse, with respect to controlled 
substances, and in such other cases as the Secretary deems appropriate.

SEC. 263. USE OF STANDARD IDENTIFICATION NUMBERS.

    (a) In General.--Effective January 1, 1994, each health benefit 
plan shall--
            (1) for each of its beneficiaries that has a social 
        security account number, use that number as the personal 
        identifier for claims processing and related purposes, and
            (2) for each provider that has a unique identifier for 
        purposes of title XVIII of the Social Security Act and that 
        furnishes health care items or services to a beneficiary under 
        the plan, use that identifier as the identifier of that 
        provider for claims processing and related purposes.
    (b) Compliance.--
            (1) In general.--The Secretary may impose a civil money 
        penalty on any health benefit plan (other than a health benefit 
        plan described in paragraph (2)) that fails to comply with 
        standards established under subsection (a) in an amount not to 
        exceed $100 for each such failure. The provisions of section 
        1128A of the Social Security Act (other than the first sentence 
        of subsection (a) and other than subsection (b)) shall apply to 
        a civil money penalty under this paragraph in the same manner 
        as such provisions apply to a penalty or proceeding under 
        section 1128A(a) of such Act.
            (2) Plans subject to effective state regulation.--A plan 
        described in this paragraph is a health benefit plan that is 
        subject to regulation by a State, if the Secretary finds that--
                    (A) the State provides for application of the 
                requirement of subsection (a), and
                    (B) the State regulatory program provides for the 
                appropriate and effective enforcement of such 
                requirement with respect to such plans.

Subtitle D--Limitation of Antitrust Recovery for Certain Hospital Joint 
                                Ventures

SEC. 271. PURPOSE.

    The purpose of this subtitle is to encourage cooperation among 
hospitals in order to contain costs and achieve a more efficient health 
care delivery system through the elimination of unnecessary duplication 
and proliferation of expensive high technology equipment, medical 
services, or ancillary services.

SEC. 272. DEFINITIONS.

    For the purposes of this subtitle:
            (1) The term ``antitrust laws'' has the meaning given it in 
        subsection (a) of the first section of the Clayton Act (15 
        U.S.C. 12(a)), except that such term includes--
                    (A) section 5 of the Federal Trade Commission Act 
                (15 U.S.C. 45) to the extent such section applies to 
                unfair methods of competition, and
                    (B) any State law similar to the antitrust laws.
            (2) The term ``high technology equipment'' means equipment 
        and devices utilized in medical care, and the technical support 
        systems for them, that--
                    (A) have acquisition costs greater than $1,000,000 
                or annual operating costs greater than $500,000, and
                    (B) use technologies with respect to which there is 
                a reasonable expectation that shared ownership will 
                avoid a significant degree of actual or anticipated 
                excess capacity of service in the geographical area to 
                be served.
            (3) The term ``medical services'' means services that are 
        involved in providing medical care to patients and that--
                    (A) have annual operating costs greater than 
                $1,000,000, and
                    (B) with respect to which there is a reasonable 
                expectation that shared ownership will avoid a 
                significant degree of the actual or anticipated excess 
                capacity of such services in the geographical area to 
                be served,
        and may include mobile services.
            (4) The term ``ancillary services'' means support functions 
        associated with operating a hospital (laundry, billing, patient 
        transportation, data processing, and other similar services) 
        the predominant function of which does not involve the 
        provision of medical treatment to patients.
            (5) The term ``hospital'' means a hospital that--
                    (A) has entered into, and has in effect a 
                participation agreement under section 1866(a) of the 
                Social Security Act (42 U.S.C. 1395cc(a)), or
                    (B) has in effect a participation agreement under 
                title XIX of such Act (42 U.S.C. 1396 et seq.) with the 
                State in which the hospital is located.
            (6) The term ``hospital joint venture'' means an agreement 
        between 2 or more hospitals that is entered into solely for the 
        purpose of sharing in the purchase or operation of high 
        technology equipment, medical services, or ancillary services, 
        and that involves substantial integration or financial risk-
        sharing between the parties. The term excludes--
                    (A) exchanging information among competitors 
                relating to costs, sales, profitability, prices, 
                marketing, or distribution of any product, process, or 
                service that is not reasonably required to carry out 
                such agreement,
                    (B) entering into any arrangement or engaging in 
                any other conduct to restrict, require, or otherwise 
                involve the marketing by any party to such agreement of 
                any product, process, or service that is not reasonably 
                required to carry out such agreement, and
                    (C) entering into any arrangement or engaging in 
                any other conduct to restrict or require the 
                participation by any party to such agreement in conduct 
                that is not reasonably required to carry out such 
                agreement.
            (7) The term ``Attorney General'' means the Attorney 
        General of the United States.
            (8) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
            (9) The term ``Commission'' means the Federal Trade 
        Commission.

SEC. 273. LIMITATION ON DAMAGES FOR ANTITRUST VIOLATIONS.

    Monetary recovery on a claim in any action brought under the 
antitrust laws against a hospital that is a party to a hospital joint 
venture shall be limited to actual damages if--
            (1) the hospitals forming such venture meet the 
        notification requirements specified in section 274,
            (2) the claim results from conduct that is within the scope 
        of the notification filed under section 274, and
            (3) the action is filed after such notification becomes 
        effective pursuant to section 274(c).

SEC. 274. DISCLOSURE OF HOSPITAL JOINT VENTURE.

    (a) Written Notifications; Filing.--Any hospital that is a party to 
a hospital joint venture, acting on the venture's behalf, not later 
than 90 days after entering into a written agreement to form the 
venture, or not later than 90 days after, the date of the enactment of 
this Act, whichever is later, may file simultaneously with the Attorney 
General, the Secretary, and the Commission, a written notification 
disclosing--
            (1) the identities of the parties to the venture, and
            (2) the nature, objectives, and planned activity of the 
        venture.
Any hospital that is a party to a hospital joint venture, acting on the 
venture's behalf, may file additional disclosure notifications pursuant 
to this section as are appropriate to extend the protections of section 
273. In order to maintain the protections of section 273, the venture, 
not later than 90 days after a change in its membership or its planned 
activity, shall file simultaneously with the Attorney General, the 
Secretary, and the Commission a written notification disclosing such 
change.
    (b) Publication; Federal Register; Notice.--Not later than 30 days 
after receiving a notification filed under subsection (a), the 
Secretary, after consultation with the Attorney General and the 
Commission, shall publish in the Federal Register a notice with respect 
to the hospital joint venture that identifies the parties to the 
venture and that describes the planned activity of the venture. Prior 
to its publication, the contents of such notice shall be made available 
to the parties to the venture.
    (c) Effect of the Notice.--If with respect to a notification filed 
under subsection (a) of this section, notice is published in the 
Federal Register, then such notification shall operate to convey the 
protections of section 273 as of the earlier of--
            (1) the date of the publication of notice under subsection 
        (b), or
            (2) if such notice is not so published within the time 
        required by subsection (b) of this section, after the 
        expiration of the 30-day period beginning on the date that the 
        Attorney General, the Secretary, or the Commission receives the 
        applicable information described in subsection (a).
    (d) Exemption; Disclosure; Information.--Except with respect to the 
information published pursuant to subsection (b)--
            (1) all information and documentary material submitted as 
        part of a notification filed pursuant to this section, and
            (2) all other information obtained by the Attorney General, 
        the Secretary, or the Commission in the course of any 
        investigation, administrative proceeding, or case, with respect 
        to a potential violation of the antitrust laws by the joint 
        venture with respect to which such notification was filed,
shall be exempt from disclosure under section 552 of title 5, United 
States Code, and shall not be made publicly available by any agency of 
the United States to which such section applies, except as relevant to 
a law enforcement investigation or in a judicial or administrative 
proceeding in which such information and material is subject to any 
protective order.
    (e) Withdrawal of Notification.--Any party that files a 
notification pursuant to this section may withdraw such notification 
before notice of the hospital joint venture involved is published under 
subsection (b) of this section. Any notification so withdrawn shall not 
be subject to subsection (b) and shall not confer the protections of 
section 273.
    (f) Judicial Review: Inapplicable With Respect to Notifications.--
Any action taken or not taken by the Attorney General, the Secretary, 
or the Commission with respect to notifications filed pursuant to this 
section shall not be subject to judicial review.
    (g) Admissibility Into Evidence: Disclosure of Conduct; Publication 
of Notice; Supporting or Answering Claims Under Antitrust Laws.--
            (1) Except as provided in paragraph (2), the fact of 
        disclosure of conduct under subsection (a) and the fact of 
        publication of a notice under subsection (b) shall be 
        admissible into evidence in any judicial or administrative 
        proceeding for the sole purpose of establishing that a person 
        is entitled to the protections of section 273.
            (2) No action by the Attorney General, the Secretary, or 
        the Commission taken pursuant to this section shall be 
        admissible into evidence in any proceeding for the purpose of 
        supporting or answering any claim under the antitrust laws.

                Subtitle E--Medicaid Program Flexibility

SEC. 281. MODIFICATION OF FEDERAL REQUIREMENTS TO ALLOW STATES MORE 
              FLEXIBILITY IN CONTRACTING FOR COORDINATED CARE SERVICES 
              UNDER MEDICAID.

    (a) In General.--Section 1903(m) of the Social Security Act (42 
U.S.C. 1396b(m)) is amended--
            (1) by striking all that precedes paragraph (4) and 
        inserting the following:
    ``(m) Coordinated Care.--
            ``(1) Payment conditioned on compliance.--
                    ``(A) General rule.--No payment shall be made under 
                this title to a State with respect to expenditures 
                incurred by it for payment to a risk contracting entity 
                or primary care case management entity (as defined in 
                subparagraph (B)), or with respect to an undertaking 
                described in paragraph (6), unless the State and the 
                entity or undertaking meet the applicable requirements 
                of this subsection. For purposes of determining whether 
                payment may be made under this section, the Secretary 
                may reject a State's determination of compliance with 
                any provision of this subsection.
                    ``(B) General definitions.--For purposes of this 
                title--
                            ``(i) Risk contracting entity.--The term 
                        `risk contracting entity' means an entity that 
                        has a contract with the State agency under 
                        which the entity--
                                    ``(I) provides or arranges for the 
                                provision of health care items or 
                                services to individuals eligible for 
                                medical assistance under the State plan 
                                under this title, and
                                    ``(II) is at risk (as defined in 
                                clause (iv)) for part or all of the 
                                cost of such items or services 
                                furnished to such individuals.
                            ``(ii) Primary care case management 
                        program.--The term `primary care case 
                        management program' means a State program under 
                        which individuals eligible for medical 
                        assistance under the State plan under this 
                        title are enrolled with primary care case 
                        management entities, and are entitled to 
                        receive specified health care items and 
                        services covered under such plan only as 
                        arranged for and approved by such entities.
                            ``(iii) At risk.--An entity is `at risk', 
                        for purposes of this subparagraph, if it has a 
                        contract with the State agency under which it 
                        is paid a fixed amount for providing or 
                        arranging for the provision of specified health 
                        care items or services to an individual 
                        eligible for medical assistance and enrolled 
                        with the entity, regardless of whether such 
                        items or services are furnished to such 
                        individual, and is liable for all or part of 
                        the cost of furnishing such items or services, 
                        regardless of whether or the extent to which 
                        such cost exceeds such fixed payment.
                            ``(iv) Primary care case management 
                        entity.--The term `primary care case management 
                        entity' means a health care provider (whether 
                        an individual or an entity) that, under a State 
                        primary care case management program meeting 
                        the requirements of paragraph (7), has a 
                        contract with the State agency under which the 
                        entity arranges for or authorizes the provision 
                        of health care items and services to 
                        individuals eligible for medical assistance 
                        under the State plan under this title, but is 
                        not at risk (as defined in clause (iv)) for the 
                        cost of such items or services provided to such 
                        individuals.
            ``(2) General requirements for risk contracting entities.--
                    ``(A) Federal or state qualification.--Subject to 
                paragraph (3), a risk contracting entity meets the 
                requirements of this subsection only if it either--
                            ``(i) is a qualified health maintenance 
                        organization as defined in section 1310(d) of 
                        the Public Health Service Act, as determined by 
                        the Secretary pursuant to section 1312 of that 
                        Act, or
                            ``(ii) is an entity which the State agency 
                        has determined--
                                    ``(I) affords, to individuals 
                                eligible for medical assistance under 
                                the State plan and enrolled with the 
                                entity, access to health care items and 
                                services furnished by the entity, 
                                within the area served by the entity, 
                                at least equivalent to the access such 
                                individuals would have to such health 
                                care items and services in such area if 
                                not enrolled with the entity, and
                                    ``(II) has made adequate provision 
                                against the risk of insolvency, and 
                                assures that individuals eligible for 
                                medical assistance under this title are 
                                not held liable for the entity's debts 
                                in case of the entity's insolvency.
                    ``(B) Contract with state agency.--Subject to 
                paragraph (3), a risk contracting entity meets the 
                requirements of this subsection only if the entity has 
                a written contract with the State agency that 
                provides--
                            ``(i) that the entity will comply with all 
                        applicable provisions of this subsection;
                            ``(ii) for a payment methodology based on 
                        experience rating or another actuarially sound 
                        methodology approved by the Secretary, which 
                        guarantees (as demonstrated by such models or 
                        formulas as the Secretary may approve) that 
                        payments to the entity under the contract shall 
                        not exceed 100 percent of expenditures that 
                        would have been made by the State agency in the 
                        absence of the contract;
                            ``(iii) that the Secretary and the State 
                        (or any person or organization designated by 
                        either) shall have the right to audit and 
                        inspect any books and records of the entity 
                        (and of any subcontractor) that pertain--
                                    ``(I) to the ability of the entity 
                                to bear the risk of potential financial 
                                losses, or
                                    ``(II) to services performed or 
                                determinations of amounts payable under 
                                the contract;
                            ``(iv) that in the entity's reenrollment or 
                        disenrollment of individuals eligible for 
                        medical assistance under this title and 
                        eligible to reenroll or disenroll with the 
                        entity pursuant to the contract, the entity 
                        will not discriminate among such individuals on 
                        the basis of their health status or 
                        requirements for health care services;
                            ``(v)(I) that individuals eligible for 
                        medical assistance under the State plan who 
                        have enrolled with the entity are permitted to 
                        terminate such enrollment without cause as of 
                        the beginning of the first calendar month 
                        following a full calendar month after the 
                        request is made for such termination (or at 
                        such times as required pursuant to paragraph 
                        (8)), and
                            ``(II) for notification of each such 
                        individual, at the time of the individual's 
                        enrollment, of the right to terminate 
                        enrollment;
                            ``(vi) for reimbursement, either by the 
                        entity or by the State agency, for medically 
                        necessary services provided--
                                    ``(I) to an individual eligible for 
                                medical assistance under the State plan 
                                and enrolled with the entity, and
                                    ``(II) other than through the 
                                entity because the services were 
                                immediately required due to an 
                                unforeseen illness, injury, or 
                                condition;
                            ``(vii) for disclosure of information in 
                        accordance with paragraph (4) and section 1124;
                            ``(viii) in the case of an entity that has 
                        entered into a contract with a Federally-
                        qualified health center for the provision of 
                        services of such center--
                                    ``(I) that rates of prepayment from 
                                the State are adjusted to reflect fully 
                                the rates of payment specified in 
                                section 1902(a)(13)(E), and
                                    ``(II) that, at the election of 
                                such center, payments made by the 
                                entity to such center for services 
                                described in section 1905(a)(2)(C) are 
                                made at the rates of payment specified 
                                in section 1902(a)(13)(E);
                            ``(ix) that any physician incentive plan 
                        that the entity operates meets the requirements 
                        of section 1876(i)(8);
                            ``(x) for maintenance of sufficient patient 
                        encounter data to identify the physician who 
                        delivers services to patients; and
                            ``(xi) that the entity complies with the 
                        requirement of section 1902(w) with respect to 
                        each enrollee.
            ``(3) Exceptions to requirements for risk contracting 
        entities.--The requirements of paragraph (2) (other than 
        subparagraph (B)(viii)) do not apply to an entity that--
                    ``(A)(i) received a grant of at least $100,000 in 
                the fiscal year ending June 30, 1976, under section 
                329(d)(1)(A) or 330(d)(1) of the Public Health Service 
                Act, and for the period beginning July 1, 1976, and 
                ending on the expiration of the period for which 
                payments are to be made under this title, has been the 
                recipient of a grant under either such section; and
                    ``(ii) provides to its enrollees, on a prepaid 
                capitation or other risk basis, all of the services 
                described in paragraphs (1), (2), (3), (4)(C), and (5) 
                of section 1905(a) and, to the extent required by 
                section 1902(a)(10)(D) to be provided under the State 
                plan, the services described in section 1905(a)(7);
                    ``(B) is a nonprofit primary health care entity 
                located in a rural area (as defined by the Appalachian 
                Regional Commission)--
                            ``(i) which received in the fiscal year 
                        ending June 30, 1976, at least $100,000 (by 
                        grant, subgrant, or subcontract) under the 
                        Appalachian Regional Development Act of 1965), 
                        and
                            ``(ii) for the period beginning July 1, 
                        1976, and ending on the expiration of the 
                        period for which payments are to be made under 
                        this title either has been the recipient of a 
                        grant, subgrant, or subcontract under such Act 
                        or has provided services under a contract 
                        (initially entered into during a year in which 
                        the entity was the recipient of such a grant, 
                        subgrant, or subcontract) with a State agency 
                        under this title on a prepaid capitation or 
                        other risk basis; or
                    ``(C) which has contracted with the State agency 
                for the provision of services (but not including 
                inpatient hospital services) to persons eligible for 
                medical assistance under this title on a prepaid risk 
                basis prior to 1970.''; and
            (2) by adding after paragraph (6) the following new 
        paragraphs:
            ``(7) General requirements for primary care case 
        management.--A State that elects in its State plan under this 
        title to implement a primary care case management program under 
        this subsection shall include in the plan methods for the 
        selection and monitoring of participating primary care case 
        management entities to ensure that--
                    ``(A) the numbers, geographic locations, hours of 
                operation, and other relevant characteristics of such 
                entities are sufficient to afford individuals eligible 
                for medical assistance reasonable access to and choice 
                among such entities;
                    ``(B) such entities and their professional 
                personnel are qualified to provide health care case 
                management services, through methods including ongoing 
                monitoring of compliance with applicable requirements 
                for licensing of health care providers, providing 
                training and certification of primary care case 
                managers, and providing information and technical 
                assistance; and
                    ``(C) such entities are making timely and 
                appropriate decisions with respect to enrollees' need 
                for health care items and services, and are giving 
                timely approval and referral to providers of adequate 
                quality where such items and services are determined to 
                be medically necessary.
            ``(8) State options with respect to enrollment and 
        disenrollment.--
                    ``(A) Mandatory enrollment option.--A State plan 
                may require an individual eligible for medical 
                assistance under the State plan (other than a medicare 
                qualified beneficiary) to enroll with a risk 
                contracting entity or primary care case management 
                entity, without regard to the requirement of section 
                1902(a)(1) (concerning Statewideness), the requirements 
                of section 1902(a)(10)(B) (concerning comparability of 
                benefits), or the requirements of section 1902(a)(23) 
                (concerning freedom of choice of provider), if the 
                individual is permitted a choice--
                            ``(i) between or among two or more risk 
                        contracting entities,
                            ``(ii) between a risk contracting entity 
                        and a primary care case management entity, or
                            ``(iii) between or among two or more 
                        primary care case management entities.
                    ``(B)(i) Restrictions on disenrollment without 
                cause.--A State plan may restrict the period in which 
                individuals enrolled with a qualifying risk contracting 
                entity (as defined in clause (ii)) may terminate such 
                enrollment without cause to the first month of each 
                period of enrollment (as defined in clause (iii)), but 
                only if the State provides notification, at least once 
                during each such enrollment period, to individuals 
                enrolled with such entity of the right to terminate 
                such enrollment and the restriction on the exercise of 
                this right. Such restriction shall not apply to 
                requests for termination of enrollment for cause.
                    ``(ii) For purposes of this subparagraph, the term 
                `qualifying risk contracting entity' means a risk 
                contracting entity that is--
                            ``(I) a qualified health maintenance 
                        organization as defined in section 1310(d) of 
                        the Public Health Service Act;
                            ``(II) an eligible organization with a 
                        contract under section 1876;
                            ``(III) an entity that is receiving (and 
                        has received during the previous 2 years) a 
                        grant of at least $100,000 under section 
                        329(d)(1)(A) or 330(d)(1) of the Public Health 
                        Service Act;
                            ``(IV) an entity that is receiving (and has 
                        received during the previous 2 years) at least 
                        $100,000 (by grant, subgrant, or subcontract) 
                        under the Appalachian Regional Development Act 
                        of 1965;
                            ``(V) a program pursuant to an undertaking 
                        described in paragraph (6) in which at least 25 
                        percent of the membership enrolled on a prepaid 
                        basis are individuals who (I) are not insured 
                        for benefits under part B of title XVIII or 
                        eligible for medical assistance under this 
                        title, and (II) (in the case of such 
                        individuals whose prepayments are made in whole 
                        or in part by any government entity) had the 
                        opportunity at the time of enrollment in the 
                        program to elect other coverage of health care 
                        costs that would have been paid in whole or in 
                        part by any governmental entity; or
                            ``(VI) an entity that, on the date of 
                        enactment of this provision, had a contract 
                        with the State agency under a waiver under 
                        section 1115 or 1915(b) and was not subject to 
                        a requirement under this subsection to permit 
                        disenrollment without cause.
                    ``(iii) For purposes of this subparagraph, the term 
                `period of enrollment' means--
                            ``(I) a period not to exceed 6 months in 
                        duration, or
                            ``(II) a period not to exceed one year in 
                        duration, in the case of a State that, on the 
                        effective date of this subparagraph, had in 
                        effect a waiver under section 1115 of 
                        requirements under this title under which the 
                        State could establish a 1-year minimum period 
                        of enrollment with risk contracting entities.
                    ``(C) Reenrollment of individuals who regain 
                eligibility.--In the case of an individual who--
                            ``(i) in a month is eligible for medical 
                        assistance under the State plan and enrolled 
                        with a risk contracting entity with a contract 
                        under this subsection,
                            ``(ii) in the next month (or next 2 months) 
                        is not eligible for such medical assistance, 
                        but
                            ``(iii) in the succeeding month is again 
                        eligible for such benefits,
                the State plan may enroll the individual for that 
                succeeding month with such entity, if the entity 
                continues to have a contract with the State agency 
                under this subsection.''.
    (b) State Option to Guarantee Medicaid Eligibility.--Section 
1902(e)(2) of such Act (42 U.S.C. 1396a(e)(2)) is amended--
                    (A) in subparagraph (A), by striking all that 
                precedes ``(but for this paragraph)'' and inserting 
                ``In the case of an individual who is enrolled--
                            ``(i) with a risk contracting entity (as 
                        defined in section 1903(m)(1)(B)(i)) 
                        responsible for the provision of inpatient 
                        hospital services and any other service 
                        described in paragraphs (2), (3), (4), (5), and 
                        (7) of section 1905(a),
                            ``(ii) with any risk contracting entity (as 
                        so defined) in a State that, on the effective 
                        date of this provision, had in effect a waiver 
                        under section 1115 of requirements under this 
                        title under which the State could extend 
                        eligibility for medical assistance for 
                        enrollees of such entity, or
                            ``(iii) with an eligible organization with 
                        a contract under section 1876 and who would'', 
                        and
                    (B) in subparagraph (B), by striking ``organization 
                or'' each place it appears.
    (c) Conforming Amendments.--
            (1) Section 1128(b)(6)(C)(i) of such Act (42 U.S.C. 1320a-
        7(b)(6)(C)(i)) is amended by striking ``health maintenance 
        organization'' and inserting ``risk contracting entity''.
            (2) Section 1902(a)(57) of such Act (42 U.S.C. 
        1396a(a)(57)) is amended by striking ``or health maintenance 
        organization'' and inserting ``or risk contracting entity''.
            (3) Section 1902(a) of such Act (42 U.S.C. 1396a(a)) is 
        amended--
                    (A) by striking ``and'' at the end of paragraph 
                (54);
                    (B) in the paragraph (55) inserted by section 
                4602(a)(3) of Public Law 101-508, by striking the 
                period at the end and inserting a semicolon;
                    (C) by redesignating the paragraph (55) inserted by 
                section 4604(b)(3) of Public Law 101-508 as paragraph 
                (56), by transferring and inserting it after the 
                paragraph (55) inserted by section 4602(a)(3) of such 
                Act, and by striking the period at the end and 
                inserting a semicolon;
                    (D) by placing paragraphs (57) and (58), inserted 
                by section 4751(a)(1)(C) of Public Law 101-508, 
                immediately after paragraph (56), as redesignated by 
                paragraph (3);
                    (E) in the paragraph (58) inserted by section 
                4751(a)(1)(C) of Public Law 101-508, by striking the 
                period at the end and inserting a semicolon;
                    (F) by redesignating the paragraph (58) inserted by 
                section 4752(c)(1)(C) of Public Law 101-508 as 
                paragraph (59), by transferring and inserting it after 
                the paragraph (58) inserted by section 4751(a)(1)(C) of 
                such Act, and by striking the period at the end and 
                inserting ``; and''; and
                    (G) by inserting after such paragraph (59) the 
                following new paragraph:
            ``(60) at State option, provide for a primary care case 
        management program in accordance with section 1903(m)(7).''.
            (4) Section 1902(p)(2) of such Act (42 U.S.C. 1396a(p)(2)) 
        is amended by striking ``health maintenance organization'' and 
        inserting ``risk contracting entity''.
            (5) Section 1902(w) of such Act (42 U.S.C. 1396a(w)) is 
        amended--
                    (A) in paragraph (1), by striking ``section 
                1903(m)(1)(A)'' and inserting ``section 
                1903(m)(2)(C)(xi)'', and
                    (B) in paragraph (2)(E), by striking ``health 
                maintenance organization'' and ``the organization'' and 
                inserting ``risk contracting entity'' and ``the 
                entity'', respectively.
            (6) Section 1903(k) of such Act (42 U.S.C. 1396b(k)) is 
        amended by striking ``health maintenance organization'' and 
        inserting ``risk contracting entity''.
            (7) Section 1903(m)(4)(A) of such Act (42 U.S.C. 
        1396b(m)(4)(A)) is amended--
                    (A) in the first sentence, by striking ``Each 
                health maintenance organization'' and inserting ``Each 
                risk contracting entity'',
                    (B) in the first sentence, by striking ``the 
                organization'' each place it appears and inserting 
                ``the entity'', and
                    (C) in the second sentence, by striking ``an 
                organization'' and ``the organization'' and inserting 
                ``a risk contracting entity'' and ``the risk 
                contracting entity'', respectively.
            (8) Section 1903(m)(4)(B) of such Act (42 U.S.C. 
        1396b(m)(4)(B)) is amended by striking ``organization'' and 
        inserting ``risk contracting entity''.
            (9) Section 1903(m)(5) of such Act (42 U.S.C. 1396b(m)(5)) 
        is amended in paragraphs (A)(iii) and (B)(ii) by striking 
        ``organization'' and inserting ``entity''.
            (10) Section 1903(w)(7)(A)(viii) of such Act (42 U.S.C. 
        1396b(w)(7)(A)(viii)) is amended by striking ``health 
        maintenance organizations (and other organizations with 
        contracts under section 1903(m))'' and inserting ``risk 
        contracting entities with contracts under section 1903(m)''.
            (11) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is 
        amended, in the matter preceding clause (i), by inserting 
        ``(which may be on a prepaid capitation or other risk basis)'' 
        after ``payment'' the first place it appears.
            (12) Section 1916(b)(2)(D) of such Act (42 U.S.C. 
        1396o(b)(2)(D)) is amended by striking ``health maintenance 
        organization'' and inserting ``risk contracting entity''.
            (13) Section 1925(b)(4)(D)(iv) of such Act (42 U.S.C. 
        1396r-6(b)(4)(D)(iv)) is amended--
                    (A) in the heading, by striking ``hmo'' and 
                inserting ``risk contracting entity'',
                    (B) by striking ``health maintenance organization'' 
                and inserting ``risk contracting entity'' each place it 
                appears, and
                    (C) by striking ``section 1903(m)(1)(A)'' and 
                inserting ``section 1903(m)(1)(B)(i)''.
            (14) Paragraphs (1) and (2) of section 1926(a) of such Act 
        (42 U.S.C. 1396r-7(a)) are each amended by striking ``health 
        maintenance organizations'' and inserting ``risk contracting 
        entities''.
            (15) Section 1927(j)(1) of such Act (42 U.S.C. 1396s(j)(1)) 
        is amended by striking ``*** Health Maintenance Organizations, 
        including those organizations'' and inserting ``risk 
        contracting entities''.
    (d) Effective Date.--The amendments made by this section shall 
become effective with respect to calendar quarters beginning on or 
after January 1, 1994.

SEC. 282. PERIOD OF CERTAIN WAIVERS.

    (a) In General.--Section 1915(h) of the Social Security Act (42 
U.S.C. 1396n(h)) is amended by striking ``No waiver'' and all that 
follows through ``unless the Secretary'' and inserting ``A waiver under 
this section (other than under subsection (c), (d), or (e)) shall be 
for an initial term of 3 years and, upon the request of a State, shall 
be extended for additional 5 year periods unless the Secretary''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to waivers pursuant to applications which are approved, and with 
respect to continuations of waivers for which requests are made, later 
than 30 days after the date of the enactment of this Act.

TITLE III--REFUNDABLE CREDIT FOR COSTS OF PROVIDING EMERGENCY INDIGENT 
                                  CARE

SEC. 301. REFUNDABLE CREDIT FOR COSTS OF PROVIDING EMERGENCY INDIGENT 
              CARE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. COSTS OF PROVIDING EMERGENCY INDIGENT CARE.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this subtitle for the taxable year an amount 
equal to 15 percent of the unreimbursed eligible costs incurred by the 
taxpayer in providing emergency health care services.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Unreimbursed eligible costs.--The term `unreimbursed 
        eligible costs' means costs--
                    ``(A) which are recognized as reasonable for 
                purposes of payment under title XVIII of the Social 
                Security Act, and
                    ``(B) for which the taxpayer (other than as an 
                employee) is entitled to reimbursement.
            ``(2) Emergency health care services.--The term `emergency 
        health care services' means medical screening, examination, and 
        treatment provided to an individual pursuant to the 
        requirements of subsections (a) and (b)(1) of section 1867 of 
        the Social Security Act but only if the individual has no 
        coverage under a health insurance or health benefit plan with 
        respect to the screening, examination, or treatment.
    ``(c) Special Rules.--For purposes of this section--
            ``(1) Unreimbursed costs.--Costs shall be treated as 
        unreimbursed not earlier than the time such costs would be 
        allowable as a deduction under section 166 were the obligation 
        to pay such costs a debt to which section 166 applies.
            ``(2) No credit for deductible worthless debts.--No credit 
        shall be allowed under this section for any debt which would be 
        allowable as a deduction under section 166 if the debt became 
        worthless.
    ``(d) Payments to Tax-Exempt Entities.--
            ``(1) In general.--In the case of a tax-exempt entity, in 
        lieu of the credit under subsection (a), the Secretary shall 
        pay the amount determined under this section if claim therefor 
        is filed at such time and in such manner as the Secretary may 
        prescribe.
            ``(2) Tax-exempt entity.--For purposes of paragraph (1), 
        the term `tax-exempt entity' means--
                    ``(A) a State, a political subdivision of a State, 
                the District of Columbia, any possession of the United 
                States, and an agency or instrumentality of 1 or more 
                of the foregoing, and
                    ``(B) an organization exempt from tax under section 
                501(a) (other than an organization required to make a 
                return of tax imposed under this subtitle).''
    (b) Clerical Amendment.--The table of sections for such subpart C 
is amended by striking the last item and inserting the following new 
items:

                              ``Sec. 35. Costs of providing emergency 
                                        indigent care.
                              ``Sec. 36. Overpayments of tax.''
    (c) Effective Date.--The amendments made by this section shall 
apply to costs incurred with respect to emergency health care services 
provided on or after the 1st day of the 1st calendar month which begins 
more than 60 days after the date of the enactment of this Act in 
taxable years ending after such date.

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